We have our community association manager sign communications as the association’s agent. Did new law change that in any way? Is this still a part of their fiduciary duty?
No. Effective on July 1, 2014, the scope of a community association manager’s duty to his/her association customers changed, when a legislative change to Section 468.4334 went into effect, to formalize the type of agency.
Under the new law, managers and management companies are required to discharge their duties loyally, skillfully, and diligently; to deal honestly and fairly; and act in good faith; and with care and full disclosure. They must also account for all funds which are in their control.
The new law refines and clarifies the “Agency” relationship. The legal definition of agency is: A consensual relationship created by contract or by law where one party, the principal, grants authority for another party, the agent, to act on behalf of and under the control of the principal to deal with a third party. An agency relationship is fiduciary in nature, and the actions and words of an agent exchanged with a third party bind the principal.
The change to the law supplements Chapter 718, Section 718.111(1)(a) which provides: “It is the intent of the Legislature that nothing in this paragraph shall be construed as providing for or removing a requirement of a fiduciary relationship between any manager employed by the association and the unit owners.”
In other words, the language in the new law also creates a fiduciary duty for managers for performance under a written contract or pursuant to Chapter 468. This applies to all licensed community association managers, for all types of associations governed by Chapter 468.
By Attorney Ellen Hirsch de Haan, Esq.
